New Mexico regulators reject PNM request for rate hike

ALBUQUERQUE (AP) >> New Mexico regulators on Wednesday rejected a proposal by the state's largest electric utility to raise rates and charge more for new solar customers to connect to the grid.

The Public Regulation Commission voted unanimously during a meeting in Santa Fe. The vote followed a hearing examiner's recommendation in April that the utility's application for a 12 percent rate hike be denied over concerns that it was incomplete.

The utility said it was disappointed in the decision and accused state regulators of being inconsistent in applying standards for estimating rates for future years.

"This type of inconsistent decision-making creates uncertainty for consumers and regulated companies in New Mexico," PNM spokesman Pahl Shipley said in a statement. "It also sends a strong message that New Mexico is not business friendly and will likely affect important economic development efforts."

PNM could either appeal or file a new application. Shipley said the utility is reviewing its options.

The utility had said the increase was needed to help cover the costs of new solar-power generating stations, federally-mandated pollution controls at the coal-fired San Juan Generating Station and other infrastructure.

The increase also would have helped to cover declines in demand that have resulted from energy conservation efforts and the sluggish economy.

Under PNM's request, residential customers could have seen their monthly bills jump by $9.75 starting in January 2016 and new solar customers would have faced fees ranging from $21 to $36 to connect to the grid.

PNM wanted to submit supplemental testimony to correct any deficiencies in its request, but an attorney with the PRC Office of the General Counsel said filing a new application would make it easier for staff and intervening parties to review and verify data, the Albuquerque Journal reported.

PRC attorney Judy Amer said filing a new application would set the hearing process back by a few months. That in turn would delay the start date for any rate hike eventually approved by the commission.

Mariel Nanasi, executive director of New Energy Economy, said there were "so many unanswered questions and unsupported values" that it put her group and other interveners at a disadvantage when reviewing the utility's data.